Photo: Bloomberg TV
JPMorgan has a note out this morning after LinkedIn’s earnings beat yesterday. The bottomline: it’s great that LinkedIn beat estimates, but the stock is still really expensive so they’re holding their rating at “Neutral.” Price target is upped to $98 from $85.
Some points to note:
- Most of the unexpected growth came from “marketing solutions” (i.e. ads). This is mostly because traffic to LinkedIn’s sites has been growing really fast, so they can show more ads. This is a place where LinkedIn still has a lot of low-hanging fruit to pick because evidence suggests right now LinkedIn ads don’t perform well.
- Its hiring business, which is the biggest one, is growing very nicely. This is mostly because of user growth and also because LinkedIn is starting to crack the SMB market and not just big enterprises. If the latter happens in a sustained way, this could be big.
- LinkedIn’s guidance was “likely conservative,” JPM writes. “For the full year, management expects revenue of $475M-$485M & EBITDA of $65M-$70M. … We are projecting 2011 revenue/EBITDA of $488.6M/$72.5M.”